This is a step-by-step stock review to answer the question, is Scotts Miracle-Gro (SMG) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Scotts Miracle-Gro (SMG) stock a good buy?
- Scotts Miracle-Gro Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is Scotts Miracle-Gro (SMG) stock a good buy?
1.Scotts Miracle-Gro Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founding: The Scotts Miracle-Gro Company was founded in 1868 by Orlando McLean Scott in Marysville, Ohio, initially as a seed company.
- Early Growth: Expanded its product line in the early 20th century to include fertilizers and lawn care products, becoming a household name in gardening.
- Acquisitions: Acquired several companies to broaden its product offerings, including Miracle-Gro in 1995, a leading brand in plant food and fertilizers.
- IPO: Went public in 1992, trading on the New York Stock Exchange under the ticker symbol “SMG.”
- Market Leadership: Established itself as the leading supplier of consumer lawn, garden, and pest control products in North America.
- Innovative Products: Continuously innovated, introducing new products and technologies, such as water-soluble fertilizers and eco-friendly pest control solutions.
- Hawthorne Gardening Company: Entered the hydroponics and indoor gardening market with the creation of the Hawthorne Gardening Company in 2014, catering to the growing cannabis industry.
- Sustainability Efforts: Committed to sustainability by promoting environmentally friendly products and practices.
- Strategic Partnerships: Formed partnerships with major retailers like Home Depot and Lowe’s to expand its market reach.
- Global Presence: Expanded its operations internationally, offering a wide range of gardening and lawn care products globally.
Scotts Miracle-Gro’s history is characterized by innovation, strategic growth, and a commitment to helping consumers create beautiful and healthy gardens and lawns.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary:Overpriced
- Score: 47
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Scotts Miracle-Gro makes money:
- Consumer Products: Earns revenue from selling lawn and garden products, including fertilizers, pest control, and seeds, under brands like Scotts, Miracle-Gro, and Ortho.
- Hawthorne Gardening Company: Generates income from supplying hydroponics and indoor gardening products, catering to the cannabis and home gardening markets.
- Professional Products: Sells professional-grade products for commercial landscapers, golf courses, and sports fields.
- Acquisitions: Income from acquisitions like the purchase of The Hawthorne Gardening Company, expanding its footprint in the hydroponics sector.
- Online Sales: Revenue from e-commerce channels, including its website and third-party platforms, selling a wide range of gardening and lawn care products.
- International Markets: Profits from its global presence, distributing products to markets outside North America.
- Innovation and Technology: Earns through innovative product development, including eco-friendly and sustainable solutions.
Here are a few of the other companies that Scotts Miracle-Gro has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- The Hawthorne Gardening Company
- Ortho
- Miracle-Gro
- Scotts
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Scotts Miracle-Gro stacks up against other companies.
- FMC Corporation. (FMC) – 56
- CF Industries Holdings, Inc. (CF) – 50
- ICL Group Ltd. (ICL) – 44
- CVR Partners, LP. (UAN) – 39
- Intrepid Potash, Inc. (IPI) – 33
- The Scotts Miracle-Gro Company. (SMG) – 33
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Revenue Growth: James Hagedorn Drove significant revenue growth, expanding Scotts Miracle-Gro’s market share and establishing it as a leading player in the lawn and garden industry.
- Acquisitions: Spearheaded key acquisitions, including The Hawthorne Gardening Company, which enhanced the company’s presence in the hydroponics and indoor gardening markets.
- Product Innovation: Promoted innovation in product development, including the introduction of new and improved lawn care and gardening products.
- Brand Expansion: Strengthened the company’s brand portfolio by integrating acquired brands and launching new product lines under the Scotts, Miracle-Gro, and Ortho names.
- Strategic Focus: Shifted the company’s focus towards high-growth areas, such as the cannabis sector and indoor gardening, aligning with evolving market trends.
- Financial Performance: Achieved strong financial results, including improved profitability and operational efficiency, contributing to the company’s overall success.
- Sustainability Initiatives: Advanced sustainability efforts, including environmentally friendly products and practices, reflecting a commitment to responsible corporate citizenship.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Scotts Miracle-Gro (SMG) is 53/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Scotts Miracle-Gro (SMG) stock a good buy?
Some of the top questions investors can have is Scotts Miracle-Gro (SMG) stock a good buy or should I buy Scotts Miracle-Gro (SMG) stock?
Scotts Miracle-Gro is a strong investment option due to its dominant market position in the lawn and garden industry. The company has shown consistent revenue growth through innovative products and strategic acquisitions, such as The Hawthorne Gardening Company, which has expanded its presence in the fast-growing hydroponics and indoor gardening markets. Scotts Miracle-Gro benefits from strong brand recognition with well-known names like Scotts, Miracle-Gro, and Ortho, driving customer loyalty and repeat business. Additionally, the company’s focus on sustainability and environmentally friendly products aligns with current consumer trends, further bolstering its market position. However, potential investors should consider challenges such as fluctuating demand due to seasonality and economic conditions. Despite these challenges, Scotts Miracle-Gro’s solid market presence, continuous innovation, and strategic expansion efforts make it a compelling investment choice in the agricultural and gardening sectors.
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To truly know if Scotts Miracle-Gro is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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